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TexasHB 315989th Legislature Regular SessionHouseWALLET

Relating to a severance tax exemption for oil and gas produced from certain previously inactive restimulation wells; providing a civil penalty.

Sponsored By: Drew Darby, Phil King (Republican)

Signed by Governor

Civil Remedies & LiabilitiesOil & GasTaxation--Energy ResourcesTaxation--GeneralCOMPTROLLER OF PUBLIC ACCOUNTSRAILROAD COMMISSION

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 2 costs, 0 mixed.

Revived wells get capped production tax relief

Beginning January 1, 2026, Texas exempts qualifying revived wells' oil, gas, and other hydrocarbons from covered production taxes. Wells must have been completed, produced hydrocarbons, and become inactive immediately before receiving a fracture treatment to boost production. They need at least 60 months of reported production before treatment; enhanced oil recovery projects and never-completed, nonproducing wells are excluded. The taxpayer must apply to the Texas Comptroller with a Railroad Commission certificate and a treatment-cost report. Relief ends on the last day of the 36th consecutive month after the month production resumes, or sooner when the dollar cap is reached. Total exempted taxes and related credits cannot exceed documented treatment costs or $750,000 per well, whichever is less. Only current costs directly tied to performing the treatment count. Taxes paid after certification but before approval qualify for a credit only within the exemption period. Credit applications must meet the standard tax-refund filing deadline. Certificate revocation ends relief for production after revocation. The law covers production on or after January 1, 2026, and leaves earlier tax liabilities unchanged.

Penalties for false well tax claims

Beginning January 1, 2026, knowingly seeking the exemption for a well that does not qualify triggers a civil penalty. The maximum is $10,000 plus the difference between taxes paid or attempted to be paid and taxes due. The Texas Attorney General can sue to recover the penalty in Travis County. Knowingly submitting a false material fact to the Railroad Commission or Comptroller also triggers penalties. Those penalties come from Chapters 85 and 91 of the Texas Natural Resources Code; this provision states no amounts.

Gas producers cannot combine tax breaks

Beginning January 1, 2026, gas producers cannot combine the high-cost gas tax reduction with the revived-well exemption. This restriction applies to gas previously certified as high-cost gas or expected to be high-cost gas. It lasts only while that gas receives the revived-well exemption.

Sponsors & Cosponsors

Sponsors

  • Drew Darby

    House

  • Phil King

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 262 • No: 31

Senate vote • 5/26/2025

Record vote

Yes: 0 • No: 0

Senate vote • 5/26/2025

Record vote

Yes: 0 • No: 0

House vote • 5/15/2025

Record vote

Yes: 115 • No: 23

House vote • 5/14/2025

Record vote

Yes: 121 • No: 7

House vote • Unknown

Committee vote: Ways & Means

Yes: 11 • No: 1

Senate vote • Unknown

Committee vote: Finance

Yes: 15 • No: 0

Actions Timeline

  1. Effective on 1/1/26

    6/20/2025House

  2. Signed by the Governor

    6/20/2025House

  3. Sent to the Governor

    5/28/2025House

  4. Signed in the Senate

    5/27/2025Senate

  5. Signed in the House

    5/27/2025House

  6. Reported enrolled

    5/27/2025House

  7. Senate passage reported

    5/26/2025House

  8. Record vote

    5/26/2025Senate

  9. Passed

    5/26/2025Senate

  10. Read 3rd time

    5/26/2025Senate

  11. Record vote

    5/26/2025Senate

  12. Three day rule suspended

    5/26/2025Senate

  13. Vote recorded in Journal

    5/26/2025Senate

  14. Read 2nd time & passed to 3rd reading

    5/26/2025Senate

  15. Rules suspended-Regular order of business

    5/26/2025Senate

  16. Placed on intent calendar

    5/26/2025Senate

  17. Committee report printed and distributed

    5/23/2025Senate

  18. Reported favorably w/o amendments

    5/23/2025Senate

  19. Vote taken in committee

    5/23/2025Senate

  20. Considered in public hearing

    5/23/2025Senate

  21. Failed to receive affirmative vote in comm.

    5/21/2025Senate

  22. Considered in public hearing

    5/21/2025Senate

  23. Referred to Finance

    5/16/2025Senate

  24. Read first time

    5/16/2025Senate

  25. Received from the House

    5/15/2025Senate

Bill Text

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